Good ideas carried to an extreme can have unintended, and adverse, effects. There’s nothing wrong with finding more ways to satisfy customer needs. There’s nothing wrong with being proud of the services and products you offer and asking consumers to do more business with you. And there’s nothing wrong with rewarding staff who succeed in meeting the bank’s goals, while being tough-minded with those who cannot.
Up to a point. As we all know, aggressive incentives, coupled with unrealistic goals, lead to bad behavior.
“How do we build deeper client relationships? Can we still cross-sell? Does this mean no goals? How do we continue to reward successful sales behaviors?”
While the Wells Fargo scandal brought this problem to a head for the industry, I would argue a correction was due. For too many institutions the goal of deepening customer relationships and building a more robust sales culture had devolved into product pushing. They may not have stepped over an ethical line. They may have called that misstep “relationship development.” But for most branch staff this merely meant asking questions to qualify consumers for products, and then pouncing on the first opportunity to tag on a request for a product sale.
The reasons for this approach were simple: It was easy.
Cross-selling is easy to measure, and unit “widget” incentives are easy to calculate. Sell more products today, get paid an incentive based on their value.
If the old model is broken, where do financial institutions go next? There is uncertainty.
In the face of regulatory concerns, and reputational risk, many institutions have pulled back. They have grown less aggressive about their sales goals. That is the wrong approach.
How do we build deeper client relationships? Can we still cross-sell? Does this mean no goals? How do we continue to reward successful sales behaviors?
There are three strategies critical to deepening relationships and fulfilling what “cross-sell” was meant to accomplish:
- Improving capabilities to deliver meaningful advice.
- Managing the customer journey.
- Appropriately aligning incentives.
- Banking on the Hard Sell: How Cross-Selling Can Kill Your Culture
- Life After The Wells Fargo Fiasco: Retooling Cross-Selling and Incentive Programs
- There’s a Better Answer Than Sales-Based Incentives
- Branches Should Be Advice Centers, But Are Banks Ready?
Branches Don’t Become Advice Centers Just by Saying So
As branch monetary transactions decline, almost all bank leaders say, “Branches of the future will be centers of advice.” It’s a lofty but appropriate ambition — but one most banks are ill-prepared to provide.
People still value branches, although they use them less. Consumers and small businesses consistently rate the convenience of a local branch, and the ability of its staff to solve more complex problems, as the deciding factors in choosing a financial institution.
Surprisingly, this particularly applies to Millennials. Although we live in an “everything is available on the internet” age, younger customers are confronting major financial decisions for the first time. They value quality advice from proven, trustworthy partners.
“Every banking institution professes to have an onboarding protocol, but do you actually reach new customers and have quality conversations?”
Financial institutions need to provide their staffs with the tools to deliver on the promise. While there are many good examples of bankers and credit union officers who, through experience, can fulfill that role, there are very few institutions which have lifted most of their branch or call center team members to this level. Nor will they, unless they re-think their approach and provide the right mix of tools and supporting structure.
Delivering on the promise also requires focusing on the customer journey. What experience do we want them to have? And how do we measure whether it is occurring?
It was simpler in the past when customers came to branches regularly and there were multiple opportunities to interact. But now branch staffs see them less. That means it is even more critical to establish protocols on how staff should interact with them.
I don’t mean superficial demonstrations such as standing up, greeting them by name, and wearing your name tag. Those are important behaviors that meaningfully contribute to the quality of service. But they are not relationship management strategies. They represent simple business courtesies.
Leaders should ask these questions:
- Every banking institution professes to have an onboarding protocol, but do you actually reach new customers and have quality conversations? Or do you depend on third-party marketing firms to send emails or literature?
- When customers open an account or come to a branch for service, do you work with them to be sure they’ve downloaded your mobile app, and made a test deposit, so they are more tied-in to your services and less dependent on branch hours?
- Do you have a structured relationship management process for all customers, prioritized by psychographic and family needs?
- Is the way you manage relationships tied to the way consumers interact with you —digital preference via email and call center, and branch preference via their local branch?
If your institution doesn’t have the tools to really understand and deliver advice, and it doesn’t have the customer journey clearly mapped, then you are dependent only on counting short-term widgets and your incentives will not be aligned.
This is not to suggest that individual performance should not be rewarded. But it must be balanced with long-term customer value development and overall team performance. And it must include activity management — not just how much you and your team sell, but what you do to build long-term customer relationships, not just short-term performance.
- Without Branches, Banks and Credit Unions Say They Can’t Survive
- Customer Experience Dominates the Branch vs. Digital Banking Debate
- Do People Want Bank and Credit Union Branches? Yes… and No
- Financial Marketers Either Get Onboarding Right or Pay a Heavy Price
Providing the Right Tools for Sales Success
Let’s face it, most branch staff are young people with little personal financial experience. They may not have bought a home. They almost certainly have not managed a business. So they need help to be able to help consumers and businesses working with the branch.
“Let’s face it, most branch staff are young people with little personal financial experience. They may not have bought a home. They almost certainly have not managed a business.”
They need front-line tools to help them consistently walk through a logical conversation to identify needs, present options, and prompt with supporting information. Otherwise, they are likely to default to “We have these five products — which one would you like?”
This is increasingly important as financial institutions cross-train staff and shift to the Universal Banker model. Institutions are asking their people to do more, know more, shift between roles more. And institutions need to help them succeed by putting the right tools on their desktop, or tablet, or portable computer so they can be successful.
Similarly, the role of branch and regional managers needs to shift from administrator to coach. But to do that, the industry needs to provide them with the protocols for the conduct of branch activities, and dashboards that show them how their staff are performing against the activities and relationship-deepening conversations required to make your organization successful.
Getting from here to there — putting in place the resources and tools needed — may seem daunting. However, the good news is that there is a proliferation of “plug and play” resources available to help financial institutions create information libraries, sales support tools, and coaching tools. These can help you get up to speed quickly.
- 7 Steps to Improve Customer Onboarding
- Acquisition, Onboarding and Cross-Sell Marketing Showcase
- The 3 Pillars of a Successful Onboarding Strategy in Banking
- Stop Cross-Selling! Help Customers Buy Instead
The Ultimate Question: Can Financial Institutions Still Cross-Sell?
Yes, we can deepen client relationships and increase the number of services and products they have with us. But we need to do this in a way that is in their best long-term interests. This must be more than a short-term “how many products did you cross-sell today” affair.
Yes, we can hold staff accountable for performance, but we need to relate those goals to an appropriate mix of personal, team, and overall activity management — not just “widget sales.”
Yes, we can make the transition from where we are today, to where we need to be tomorrow. There are excellent tools to equip our staff so they can conduct thoughtful conversations that identify real needs and provide real solutions. The result: Banks and credit unions will get high cross-sell because people choose them, and not because they push them.
David Kerstein is President of Peak Performance Consulting Group, based in Austin, TX, which specializes in helping financial institutions grow revenue and improve performance. To contact David, please send him an email.